First-Citizens Bank & Trust Company v. Camp

• Decision Date: 23 October 1970
• Docket Number: No. 13859.,13859.
• Citation: 432 F.2d 481
• Parties: FIRST-CITIZENS BANK & TRUST COMPANY, Appellee, v. William B. CAMP, Comptroller of the Currency of the United States, and First National Bank of Eastern North Carolina, Appellants.
• Court: U.S. Court of Appeals — Fourth Circuit

432 F.2d 481 (1970)

FIRST-CITIZENS BANK & TRUST COMPANY, Appellee, v. William B. CAMP, Comptroller of the Currency of the United States, and First National Bank of Eastern North Carolina, Appellants.

No. 13859.

United States Court of Appeals, Fourth Circuit.

Argued April 10, 1970.

Decided October 23, 1970.

Robert V. Zener, Atty., Dept. of Justice (William D. Ruckelshaus, Asst. Atty. Gen., and Robert H. Cowen, U. S. Atty., on brief), for appellant William B. Camp.

Carl V. Venters, Jacksonville, N. C., for appellant First National Bank of Eastern N. C.

William R. Hoke, Raleigh, N. C. (Jordan, Morris & Hoke, Raleigh, N. C., on brief), for appellee.

Before BOREMAN, WINTER and CRAVEN, Circuit Judges.

BOREMAN, Circuit Judge:

First National Bank of Eastern North Carolina (hereafter First National) applied to the Comptroller of the Currency of the United States (hereafter the Comptroller) for permission to establish a branch office in downtown Raleigh, North Carolina. This application was protested by the First-Citizens Bank & Trust Company (hereafter Citizens), a state chartered bank. After learning that the application had been approved, Citizens brought an action in the district court against the Comptroller and First National for declaratory and injunctive relief.

While this action was pending before the district court, the decision in First-Citizens Bank & Trust Company v. Camp, 409 F.2d 1086 (4 Cir. 1969), was handed down, in which we held that the Comptroller must abide by a North Carolina statute which requires that a bank doing business in North Carolina may establish a branch bank only if it is found:

"* * * (i) that the establishment of such branch * * * will meet the needs and promote the convenience of the community to be served by the bank, and (ii) that the probable volume of business and reasonable public demand in such community are sufficient to assure and maintain the solvency of said branch * * * and of the existing bank or banks in said community." N.C.Gen. Stat. § 53-62(b).

Accordingly, the parties stipulated that legal proceedings should be stayed so that the case could be returned to the Comptroller for additional administrative proceedings. After reconsideration the Comptroller issued a seven-page opinion affirming his earlier approval of First National's application. In his opinion, the Comptroller made detailed findings of fact which had led to his approval of the application and specifically found that the establishment of the branch met the "need and convenience" and the "solvency of the branch and other banks" requirements of the above-quoted North Carolina statute.

Citizens thereafter reinstated its action in the district court, alleging arbitrary and capricious action and an abuse of discretion on the part of the Comptroller in approving the application, and asking for a preliminary injunction to restrain the Comptroller from issuing his certificate of approval to First National and to restrain First National from opening the branch, pending a decision on the merits. A hearing was scheduled on the issuance of the preliminary injunction for June 11, 1969. Counsel for all parties appeared for the hearing at the stated time, but the judge was then engaged in hearing another matter. Following the conclusion of the other matter before the district judge, counsel met with the court in chambers. No testimony was taken, and Citizens filed no affidavits; First National filed an affidavit setting forth its prospective damages which would be suffered if the opening of the branch were to be delayed. The court informed counsel that it would enter a preliminary injunction unless the parties entered into a stipulation that no certificate of authority from the Comptroller's office would be issued and that First National would not open the branch until such time as the court could reach a decision on the merits. When the court could not indicate the approximate date upon which a decision on the merits would be reached, counsel for the Comptroller refused to enter into such a stipulation; counsel for the Comptroller by letter dated June 13, 1969, notified the court that the Comptroller would agree to withhold the certificate of authority until June 30, 1969, but would not agree to an "open ended stay" because the effect of such a policy would be to encourage future frivolous litigation solely for the purpose of delay.

On June 23, 1969, without making findings of fact, the district court issued an order granting the preliminary injunction on the ground that irreparable damage would be done to Citizens if First National were permitted to open its branch and it was later determined to have been an unlawful opening. Citizens was required to post a $5,000 bond for the payment of costs and damages suffered by First National should it eventually be found that the injunction was wrongfully entered. First National and the Comptroller appeal from the order granting the injunction.

The granting or denying of a motion for a preliminary injunction, pending final determination on the merits, is ordinarily within the sound discretion of the district court. Prendergast v. N. Y. Tel. Co., 262 U.S. 43, 50-51, 43 S.Ct. 466, 67 L.Ed. 853 (1923); Meiselman v. Paramount Film Distributing Corp., 180 F.2d 94, 96 (4 Cir. 1950). The inquiry upon appeal from a grant or denial of a preliminary injunction is limited to the question whether the court abused its discretion. United States v. Corrick, 298 U.S. 435, 437-438, 56 S.Ct. 829, 80 L.Ed. 1263 (1936); Meiselman v. Paramount Film Distributing Corp., 180 F.2d 94, 96 (4 Cir. 1950), supra.

However, a motion for a preliminary injunction is not to be granted automatically since "the award of an interlocutory injunction by courts of equity has never been regarded as strictly a matter of right, even though irreparable injury may otherwise result to the plaintiff." Yakus v. United States, 321 U.S. 414, 440, 64 S.Ct. 660, 674, 88 L.Ed. 834 (1944); Scripps-Howard Radio v. Comm'n, 316 U.S. 4, 10, 62 S.Ct. 875, 86 L.Ed. 1229 (1942). Accordingly, it has been held by numerous courts, including this one, that in deciding whether to stay the execution of an administrative agency's decision, a court is required to consider four factors:

"(1) Has the petitioner made a strong showing that it is likely to prevail on the merits of its appeal?

"(2) Has the petitioner shown that without such relief it will be irreparably injured?

"(3) Would the issuance of a stay substantially harm other parties interested in the proceeding?

"(4) Where lies the public interest?" Airport Comm. of Forsyth County, North Carolina v. C. A. B., 296 F.2d 95, 96 (4 Cir. 1961).

This standard was adopted in Virginia Petroleum Jobbers Ass'n v. F.P.C., 104 U.S.App.D.C. 106, 259 F.2d 921, 925 (1958), and has been applied in most other circuits. Belcher v. Birmingham Trust National Bank, 395 F.2d 685, 685-686 (5 Cir. 1968); Hamlin Testing Laboratories, Inc. v. A.E.C., 337 F.2d 221, 222 (6 Cir. 1964); Baggett Transportation Co. v. Hughes Transportation, Inc., 393 F.2d 710, 716-717 (8 Cir. 1968), cert. denied, 393 U.S. 936, 89 S.Ct. 297, 21 L.Ed.2d 272; Schwartz v. Covington, 341 F.2d 537, 538 (9 Cir. 1965); Associated Securities Corp. v. S.E.C., 283 F.2d 773, 774 (10 Cir. 1960); Eastern Air Lines v. C.A.B., 261 F.2d 830 (2 Cir. 1958). Since the district court's injunction had...